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Private foundations—philanthropic bodies making private contributions for charitable purposes—are of increasing importance to development. Foundations, especially the well-endowed US-based organisations such as that funded by Bill and Melinda Gates, are spending large sums, although precise amounts are currently difficult to determine. It is clear, however, that the total sums are far smaller than those spent by Governments.
Foundations' contribution to development goes far beyond mere expenditure. They have the capability to innovate and take risks, although in practice not all do so. They are having increasing influence on international development policy.
Their work is widely welcomed. However, some concerns exist, namely that foundations can create new, parallel structures alongside government initiatives and that they are only accountable to small boards. Foundations should be brought into global structures for donor coordination and should sign up to International Aid Transparency Initiative guidelines.
Foundations currently spend most of their money in the health sector. Where appropriate, the UK's Department for International Development (DFID) should encourage them to become more involved in education. DFID's collaboration with the Nike Foundation on the Girl Hub is worthwhile. The Hub should be replicated in other countries, notably the Democratic Republic of Congo.
There is concern that in working with foundations on large programmes, such as the Global Alliance for Vaccines and Immunisation, DFID's own spending priorities may be distorted and that DFID's spending may be switched from other sectors to health. We do not believe that this has happened to date. It is important that it does not in the future.
Inevitably, DFID engages more with large foundations than with small. Small foundations can play a useful role, for example in working with the private sector in developing countries. DFID could make use of such organisations and channel more funds through them. We appreciate that DFID is a lean organisation and that Ministers' and staff time is precious. Nevertheless, improvements could be made that need not necessarily involve substantial time. We recommend that a DFID Minister hold an annual meeting with smaller foundations, that a designated contact official for foundations be established to hold more frequent meetings (biannually or even quarterly) and that DFID produce a simple publication indicating what DFID funding foundations might apply for and how to apply.
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